Thursday, April 16, 2009

How to stimulate an economy

Again with the NPR. Today I was listening to a segment that was billed as a "report card" of sorts on how the "gigantic stimulus bill" was working out in the actual economy - "All Things Considered," I want to say. This report card focused on three areas of the economy: energy, health care, and government services - noting in passing that "stimulating" aid to the government services sector represented "one of the biggest" pieces of the pie. (I have to wonder - no, I mean I really have to wonder, since the information isn't public in this, the most transparent administration ever - just where in the Top Ten it sits.)

Let's start there, at the three sectors NPR chose to highlight. Energy: okay, that's possibly a good choice, since I gather that Americans spend somewhere between seven and ten percent of their household income, on average, on energy, and because the energy industry has undergone a ginormous runup followed by an even more ginormous crash (my family is living through said crash right now; it is indeed MORE ginormous than the runup). But NPR, in what I immediately and confidently assumed would be its tireless effort to promote the Obama "stimulus" plan as an actual source of help to the economy, chose to cover not the great bulk of the energy sector - traditional energy sources, that is - but the teeny-weeny wind-and-solar bit. Apparently wind and solar providers and facilitators are absolutely thrilled with the President's plan as well as the quick disbursement of funds therefrom.

Of course they are. Stimulating? Certainly - to the maybe three million people worldwide who work in renewable energy - directly or for suppliers. (Note: my source calls its "2.3 million" number, as of last July, "in all likelihood a conservative figure." It doesn't say why the figure's conservatism is likely. Seems to me it's just as likely that it'd be a rather optimistic number, especially considering that the figure includes "indirect" employment in renewable energy, meaning firms that might or might not actually provide renewable energy services if the market turned against them.)

NPR's grade for Obama so far? S for Stimulating. Let's move on to health care.

Datum (or, as some might call it, "anecdote"): a free clinic in Seattle's Pike Place Market. The stimulus money arrived just in time, according to the report, to keep the doors open - and what do you know, now they're hiring! Yes, it's true! Two doctors "and support staff" in unnumbered hordes (or possibly a horde of one, I'm thinking, since the horde was in fact unnumbered and referred to only as "support staff"). Why? Because they're seeing so much more walk-in traffic from people who have lost their jobs and, with them, their employer-provided health care. So the stimulus bill has "created" something in excess of two jobs in that clinic - jobs utterly unnecessary if the clientele of the clinic had jobs themselves sufficient to pay for their own health care. And those jobs will be, or at any rate, should be, in jeopardy when those clients do go back to work.

NPR's grade? An enthusiastic S for Stimulating. On to government services.

Is there really any need to discuss it? Naturally using tax money and horrific debt to create and support government jobs and jobs dependent on government, such as the much-touted roadwork and construction of federal buildings, will receive NPR's unironic S for Stimulating. But they did have a reason for choosing this economic sector. Even some NPR devotees must feel a little uncomfortable about the whole robbing-Peter-to-pay-Paul nature of "stimulating" the economy by creating government makework, so NPR had to address the point somehow; the obvious way to do so was to present a case, at least one compelling case, that would either tug at the heartstrings or engage the common sense bone, wherever it is, to prove that these jobs aren't makework after all, but real, good, sustainable jobs. So their example was Chicago road maintenance.

They began by noting that Illinois hadn't had the money (read: tax base; can't imagine why that'd be short of what was needed) to do the necessary work on its potholed roads. The stimulus bill's money apparently results in projections of an OK construction season, which the newsreader was quick to point out stood out in sharp relief against the 20% unemployment in all types of construction (versus the 8-ish percent unemployment overall at present). Why the fellow thought it'd make his point better to emphasize the "all types of construction" bit, I don't know; seems to me it only undermines his argument. As if it needed undermining; it's, again, specious to say that only through the Obama plan could these roads be repaired. If Illinois simply had enough tax revenue - voila, the problem is (or could be, provided Illinois legislators had their priorities straight - not necessarily a slam dunk, I admit) solved. Real jobs for real people, real taxpayers - that's stimulating. Road jobs that will dry up as soon as the money does - possibly short-term relief for those folks, but the opportunity cost remains uncalculated.

And that's the rub. Opportunity cost: we'll never know what any alternative to the Obama wealth-redistribution/power grab could have accomplished, because all such are lost to us now.


Lori said...

I have to ask - What's your take on Ron Paul?

Glad to see you're still blogging!

Jamie said...

You know, I never learned much about Ron Paul... Politically I'm a pretty mainstream gal, I guess, and while I understood that his economic take was much like my own, I perceived him as sufficiently "unelectable" that I (with some reluctance, and after Thompson dropped out) threw my support behind McCain.